Mid-Market Update for 5/2/2017

Apple (AAPL) Earnings on Deck/ New Trade (STM)

1:30pm (EST)

The market opened higher and has held positive territory for much of the session despite a narrow trading range that has followed. The Dow has been the strongest of the major indexes as Wall Street reacts to the latest round of earnings reports and news. Of course, the big story after the close today will be Apple’s (AAPL) numbers and guidance.

The stock is the 7th heaviest on the Dow and is represented across a number of other major indexes. Needless to say, shares will carry weight in tomorrow’s session. Analysts will be looking for Apple to earn a profit of $2.02 a share on revenue just under $53 billion.

Also adding drama to tomorrow’s trading will be Facebook (FB) with the company reporting their quarterly results ahead of the open. Like Apple, shares are also pushing all-time highs with the suit-and-ties expecting Facebook to earn $1.12 a share on revenue north of $7.8 billion.

Obviously, Tech will play a major role in trading with the Nasdaq also at fresh all-time highs. It will be very interesting to see if the index can continue to rally towards my longer-term target of Nasdaq 6,350 after kissing my near-term target of 6,100 yesterday, or if a temporary top might be in. Good news could also carry the S&P 500 past the 2,400 level and propel the Dow to fresh lifetime highs, along with the Nasdaq.

The Dow is up 35 points to 20,948 while the S&P 500 is gaining 3 points to 2,391. The Nasdaq is adding 4 points to 6,095 and the Russell 2000 is down 6 points to 1,401.

Although I don’t have a trade for Apple or Facebook, I do have a New Trade on a company that will likely react to Apple’s results and is a much cheaper play. The trade still has risk due to their partnership with Apple but I like the risk/ reward setup.


Momentum Options Play List

Closed Momentum Options Trades for 2017: 26-10 (72%). All trades are dated and time stamped for verification. New subscribers can look at the past history to see how the trades have played out or to research our Track Records.

Do not risk more than 5% of your trading account on any one trade but do try to take all of the trades. Please remember, all “Exit Targets” and “Stop Targets” are targets. You should not have any “Hard Stops” entered to close any trades or “Exit Orders” in your brokerage account unless I list one. I will send out a “Profit Alert” or “New Trade” if I want you to close a position or if a new trade comes out. Otherwise, follow instructions at all times in the 8am and 12pm–2pm (EST) updates. Also, I will usually give you a heads-up if I think I’m going to send a Trade Alert outside of these time frames.


New Trade

STMicroelectronics (STM, $16.43, up $0.19)

STM July 17.50 calls (STM170721C00017500, $0.55, up $0.05)

Action: I like these call options at current levels and you can use a Limit Order up to 70 cents to get the best fills. These are the regular STM July 17.50 calls that expire on July 21st, 2017. I will provide the parameters of the trade in tomorrow’s Pre-Market Update.

Current Trades

Oracle (ORCL, $45.30, up $0.25)

ORCL June 46 calls (ORCL170616C00046000, $0.70, up $0.10)

Entry Price: $0.55 (4/26/2017)
Exit Target: $1.10
Return: 27%
Stop Target: None

Action: Fresh resistance is at $45.50-$45.75. Rising support is at $45-$44.75.


Cypress Semiconductor (CY, $13.26, down $0.54)

CY June 14 calls (CY170616C00014000, $0.40, down $0.20)

Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Return: -53%
Stop Target: None

Action: Support at $13.25-$13. Resistance is at $13.50 with today’s pullback.


Square (SQ, $18.66, up $0.05)

SQ June 18 calls (SQ170616C00018000, $1.60, up $0.10)

Entry Price: $0.95 (4/20/2017)
Exit Target: $1.90 (closed half at $1.20 on 4/28/2017)
Return: 47%
Stop Target: $1.05 (Stop Limit)

Action: Resistance is at $18.75-$19. Support is at $18.50-$18.25.